BellSouth Corp., the dominant local telephone provider in nine southeastern states, reported a more than 20 percent drop in second-quarter profit on a slight rise in revenue, but said it was pleased with the impact its wireless unit is having on the company's bottom line.
The Atlanta-based company's results were announced before the market opened Monday.
For the three months ending June 30, BellSouth said it earned $795 million, or 43 cents a share, compared to a profit of $996 million, or 54 cents a share, for the same period a year ago.
Excluding certain wireless merger integration costs and including the impact of its 40 percent ownership of Cingular Wireless LLC, BellSouth said its earnings were $849 million, or 46 cents a share.
Analysts surveyed by Thomson Financial were expecting earnings of 43 cents a share. It wasn't immediately clear which earnings figure analysts' estimates were based on. A call to Thomson Financial went unanswered Monday morning.
Revenue in the April-June quarter rose 1.2 percent to $5.14 billion, compared to $5.08 billion recorded a year ago.
BellSouth, one of the regional phone companies that emerged from the Bell System breakup, is the dominant local service provider in Georgia, Tennessee, Florida, Alabama, Kentucky, Mississippi, North Carolina, South Carolina and Louisiana. It and SBC Communications Inc. of San Antonio are the parents of Atlanta-based Cingular, the nation's largest cell phone provider.
"The realignment of our assets toward wireless and broadband services is starting to pay off," said Duane Ackerman, chairman and chief executive. "Cingular delivered strong growth in customers, revenues and operating margins. Our results this quarter clearly demonstrate how Cingular's progress impacts BellSouth's bottom line."
For the first six months of the year, BellSouth said it earned $1.86 billion, or $1.01 a share, compared to a profit of $2.60 billion, or $1.41 a share, for the same period a year ago. Six-month revenue rose 1.7 percent to $10.23 billion, compared to $10.06 billion a year ago.